What New Data Says about Debt-Free College

New data shows that young people who don’t fit within the current college system are facing great hardship in today’s workforce. This sheds valuable insight into the debt-free college debate, the charge for injecting more money into the federal student aid system at the top of Democrat’s 2016 election talking points.

With outstanding student loans topping $1.2 trillion, it’s little wonder that Democrats from Bernie Sanders, Martin O’Malley, Elizabeth Warren, and even Hillary Clinton are choosing to make tackling student debt a priority.

But student debt is the biggest problem for non-completers, who are increasingly unable to find decent work. Good job options have become so limited for non-graduates that the millions of young Americans who do not perfectly fit into the standard college mold now find themselves at an inherent disadvantage.

Indeed, my analysis of the latest labor force data highlights the plight of young people with some college but no degree. Since 2000, young people aged 16-24 neither enrolled in school nor in the labor force in June with some college or an Associate’s degree has increased by 700,000, or about 120%.  (Overall, young people aged 16-24 neither enrolled in school nor in the labor force in June increased by 1.4 million, or 27%, since 2000.) This chart considers June to get best sense of underlying trends in young people not in school.*

LaborForce

The implication is that we need better workforce preparedness options for those without a college degree, not simply debt-free college. The policies that comprise “debt-free college” merely throw more resources at propping up the current higher education system. For Bernie Sanders, that means free tuition. For Martin O’Malley, it means regulating tuition and expanding federal grants to schools and students. For Hillary Clinton, it’s just a conceptual endorsement that everyone should graduate college, and without debt.

Such policies are short-sighted. Rising student debt is a symptom not of inadequate federal funding, but of a broken federal financial aid system and of a higher education system in need of a shake-up. Greater transfers of money from taxpayers to students and schools will only exacerbate the challenges young people face in today’s labor market, by discouraging needed innovation in higher education. It quickly turns into an expensive and inefficient way to match workers with jobs.

Indeed, with the falling costs of information-sharing, thanks to the proliferation of high-speed broadband, and promising rise of innovation in education technology, there should be a downward pressure in college tuition. And with more people than ever graduating college, we should see an overall rise in real earnings. Yet college costs continue to rise at a faster pace than inflation, and the real earnings of young graduates have fallen 12% in the last decade.

By perpetuating the status-quo, policies that comprise debt-free college will not enhance opportunity and social mobility for those who need it – it will only widen the gap between young Americans with and without a degree. The barriers to innovation in higher education will remain, along with a lack of incentive to provide higher education more efficiently and effectively. Instead of introducing productivity-enhancing reforms to deal with rising enrollments and falling state funding, such as customized education or hybrid learning, higher education institutions can continue to use federal student aid to fill budget holes. In fact, groundbreaking new research from the NY Federal Reserve directly ties increases in federal student aid eligibility to increases in tuition.

Without serious reform, we cannot possibly hope to realize the enormous potential coming from the tech sector to transform the design and delivery of higher education and workforce training. Happily there is promise for real progress: a Senate HELP hearing last week focused on need for breaking down barriers to innovation in higher education. Still, until Democrats move past the “debt-free college” approach, and the notion that college degrees are the only answer, 2016-themed rhetoric on college affordability will be little more than that.

*Note: Enrollment and labor force figures in June have been comparable with those in July over time, for those who are interested in complete mid-summer analysis.

U.S. News & World Report: The Wrong School Choice

Nevada’s new school voucher law will make inequality worse.

I’m struggling to understand an intellectual disconnect of the first order.

Nearly everyone involved in education reform wrings their hands about the achievement gaps between poor and nonpoor, between white and minority students. And most Americans are increasingly disturbed about widening inequality of income and wealth.

Yet when Nevada enacted the nation’s first law last month creating almost universal access to vouchers (technically, education savings accounts, or ESAs), few reformers pointed out that it would undermine equal opportunity. Dozens of bloggers weighed in; the Fordham Institute even invited 14 of them to comment. And not one of the 14 mentioned that the new bill would make access to quality education less equal than it is today.

Why do I say it will do that? Because it allows families to add to their education savings account to buy a more expensive education. Most parents want what’s best for their children, so those who can afford it will do just that. Those who can’t will not. And the education market will stratify by income, far more than it already does. In a decade, it will look like the markets for houses, cars and other private goods, with huge disparities based on wealth.

I just don’t get it. We need bold reform of education, yes. But do we want to widen the achievement gap? Do we want to increase inequality in America? More than half of public students in America are poor (i.e., they qualify for a free or reduced price lunch). Do we want to leave them all behind in inferior schools?

Continue reading at U.S. News & World Report. 

Weinstein on WBUR: Will Three-Year Colleges Make The Grade?

With college costs rising and many students struggling with loan debt, some colleges are offering three-year bachelor’s degree programs to reduce costs and send graduates out into the world a year sooner. PPI Senior Fellow Paul Weinstein, who also directs the M.A. in Public Management program at Johns Hopkins University, tells Here & Now’s Jeremy Hobson why he’s a big proponent of three-year degree programs.

Listen to Weinstein’s interview at Here & Now.

The Hill: Student loan borrowers need financial literacy, not more regulation

Yesterday’s Consumer Financial Protection Bureau (CFPB) field hearing in Wisconsin was designed to address how student loan servicers could better serve millions of struggling borrowers. But instead of mandating that servicers provide more after-the-fact counseling, the CFPB could better help borrowers through reforms aimed at enhancing their financial literacy on the front end.

The CFPB is right to be concerned about growing burden of student debt both on the borrowers and the broader economy. Total outstanding debt, and the share of loans in default, are at historic highs. And although countless studies show that a college degree is still worth the investment, the majority of loan defaults are wracked up by students who don’t complete college. They therefore don’t enjoy the wage premium that comes with a four-year degree.

But in its quest to hold loan servicers accountable for the student debt problem, the CFPB is overlooking the behavior of borrowers. It should also be thinking about ways to enable the students to make better borrowing choices.

Continue reading at The Hill.

Creating New Pathways into Middle Class Jobs

Many policy ideas on how to reduce income inequality and improve the upward mobility of low-income Americans are gaining popularity, on both sides of the political aisle. As usual, Republicans suggest that tax cuts heavily tilted towards the rich can address these problems, though many of their proposals would actually worsen inequality and mobility. Populist Democrats’ proposals include minimum wage increases, gender pay equity and the like—which deserve support but would have very modest effects on overall inequality and mobility into the middle class. If we want to have large impacts on these problems, and create systemic rather than mostly symbolic effects, there is only one place to go: postsecondary education or other skills by low-income workers, and whether they get the kinds of jobs that reward these skills in the job market.

Most job training in the United States now occurs in community and for-profit colleges, as well as the lower-tier of four-year colleges. We send many young people to college, even among the disadvantaged, but completion rates are very low and earnings are uneven for graduates. The public colleges that the poor attend lack not only resources but also incentives to respond to the job market. Approaches like sectoral training and career pathways, which combine classroom and work experience, show promise but need to be scaled, while employers need greater incentives to create middle-paying jobs.

This report proposes a three-part strategy for equipping more Americans with new tools for economic mobility and success: 1) A “Race to the Top” program in higher education, where the federal government would help states provide more resources to their community (and perhaps four-year) colleges but also require them to provide incentives and accountability for the colleges based on their student completion rates and earnings of graduates; 2) Expanding high-quality career and technical education along with work-based learning models like apprenticeship; and, 3) Giving employers incentives to create more good jobs.

 

Download “2015.05-Holzer_Creating-New-Pathways-into-Middle-Class-Jobs”

Osborne for US News: Motor City Schools Makeover

Public education in Detroit, where 57 percent of children live below the poverty line, is a mess. Detroit Public Schools, which ranked last out of 21 large districts on the 2013 National Assessment of Education Progress tests, is almost bankrupt, shrinking so fast it has about a third of the students it had a decade ago.

Last week, Michigan Gov. Rick Snyder released his much-anticipated plan to straighten out the mess. Most of the press reports focused on the financial issues: The proposal would require state taxpayers to subsidize the district to the tune of $53 million to $72 million per year, so its schools could continue to function while also paying down $483 million in operating debt.

But the most important aspect of the proposal got little attention. The governor wants to set up a Detroit Education Commission that would have the power to measure school performance, create a common enrollment system for all public schools, close mediocre schools (charter and traditional) and replace them with new schools (charter and traditional). This would be a huge step forward: For the first time, Detroit would have a citywide portfolio manager with the power to steer both the traditional and charter sectors toward higher performance.

Continue reading at US News & World Report.

Wall Street Journal: Tech Employment: More Diverse Than You Think

PPI Chief Economic Strategist Michael Mandel and Economist Diana Carew’s new report, Tech Opportunity for Minorities and Women: A Good News, Bad News Story, was featured in the Wall Street Journal on the growth in employment for minorities the tech labor market.

“Tech jobs are growing faster and are more diverse than people think,” said Michael Mandel, chief economic strategist at the Progressive Policy Institute and an author of the paper. He wrote it with Diana Carew, another economist at the Institute.

The authors point out that tech startups cluster in dense urban hubs, “creating inner-city jobs and positive local economic spillovers” in places with diverse populations, they write. “Few of today’s tech entrepreneurs want to put their start-ups out somewhere in a suburban office park. Instead, they place their new firms in places that are attractive to young tech workers. This has enormous potential benefits for high poverty urban populations, by promoting better education and social infrastructure.”

Progress for women is much slower. Of the 730,000 high-skill tech jobs created between 2009 and 2014, 26% went to women, who make up 47% of the total workforce. Part of the reason for the gap, Mandel said, is that science-oriented women are choosing to work in healthcare rather than tech. A Google study on the issue identified four key reasons why women say they are reluctant to pursue tech careers: Social encouragement, self-perception, academic exposure, and career perception.

Continue reading at the Wall Street Journal.

Tech Opportunity for Minorities and Women: A Good News, Bad News Story

Can tech jobs be a source of economic opportunity and upward mobility for an increasingly diverse American population?

Yes—consider two key facts about the labor market recovery, both of which show the potential for tech jobs to empower communities and bring shared prosperity.

First, since the recovery began in 2009, tech has created almost as many jobs for college graduates as healthcare. Tech jobs, here defined as all computer and mathematical occupations across industries, include computer systems analysts, network architects, and statisticians. Over 2009-2014, these tech jobs added about 730,000 college-educated workers. By comparison, healthcare occupations—which include everything from doctors and nurses to lab technicians and therapists—added 787,000 workers with a college degree.

This near parity in tech and healthcare job creation is significant given healthcare has long been regarded as the most dependable force for job creation. A growing and aging U.S. population, alongside rising medical costs, are widely seen as keeping healthcare jobs in high demand.

Second, we find that college-educated blacks and Hispanics have benefited enormously from the tech jobs boom. From 2009 to 2014, blacks with a college degree gained slightly more tech jobs than healthcare jobs—employment rose by 79,000 in computer and mathematical occupations (a 58% increase), compared to 76,000 gain in healthcare occupations (an 18% increase). The number of Hispanics with a bachelor’s degree increased by 104,000 in the healthcare occupations (a 40% increase), not so far ahead of the 81,000 gain in computer and mathematical occupations (an impressive 103% increase).

Indeed, the opportunity tech jobs are creating for non-Asian minorities defies conventional stereotypes. That’s because the tech/info jobs boom is much broader than in Silicon Valley. Tech jobs are increasingly found across all industries and the country. Tech jobs are in finance, education, and government, and urban tech clusters are forming in U.S. cities such as New Orleans, New York, and Denver.

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Jobs and Millennials: How are They Faring?

Economists everywhere are scrambling to determine how today’s weak jobs report impacts the strong recovery story of 3.2 million jobs created over the last year. But when it comes to millennials in the labor force, the monthly numbers are only a small part of the story. That’s why I’ve done some number crunching to see what’s really going on with my generation.

My research highlights two factors that are holding millennials back: too many are not completing college, and too many that do have skills that are not well-matched to labor market demands.

When it comes to young workers, aged 25-34, the gap in labor force participation for those with and without a degree is now roughly 10 percentage points – and the gap is widening.* The chart below illustrates this stark reality – having a college degree could make the difference in whether or not millennials find a job.

LaborForceMillennials

However, my research also shows that in today’s labor market, having a college degree may not be enough. That’s because, in addition to completing college, the economic prospects of millennials depends on having high-wage skills employers demand.

Since the recovery began in 2009, college graduates’ outcomes have diverged. Some have seen great success in the economic recovery, while others have floundered at the expense of their less educated peers. I call this phenomenon the “Great Squeeze,” and I have previously written on it here. That real average annual earnings for young college graduates fell by 12 percent over the last decade reinforces this divergence between workforce success and underemployment.

CollGoneWrong

It turns out that what you study matters, as not all graduates are struggling. Graduates in high-skill, high-demand fields such as computers and mathematical occupations, for example, are doing just fine. The most recent Conference Board data shows the ratio of unemployed workers to advertised jobs for computer and mathematical occupations is just 0.17.

The skills mismatch helps in part to explain why too many college graduates find themselves underemployed well after graduation. Our higher education system has not adjusted to the changing shape of the labor market, one where job creation is focused at the high and low end of the skills spectrum.

That’s why it is not obvious that while some postsecondary credential is necessary, a college degree for everyone is the right fix. Instead, these charts suggest we need to look outside status quo higher education, to encourage more pathways into the workforce that provide young people with the skills employers demand.

*Note: Few in the aged 25-34 cohort are enrolled in school, and both men and women with a high school diploma or some college, no degree had significantly lower labor force participation rates than college graduates.

Rotherham: No Congressional District Left Behind

In an op-ed today for U.S. News & World Report, Andrew Rotherham, cofounder and partner at Bellwether Education Partners, intriguingly argues that the best school reform idea is to fix the gerrymandering of legislative districts:

One of the interesting things about my job is that wealthy people ask me for ideas about how best to use their resources to improve America’s schools. There are plenty of important issues demanding attention: overhauling the sorry state of teacher preparation and teacher policy (I wrote an entire guidebook about that), giving low-income Americans more educational choice and improving educational finance are three obvious ones. But, to the consternation of colleagues in the education world, I don’t first suggest those or other specific education issues. Instead, I urge donors to support efforts to reform congressional redistricting. We won’t be able to genuinely improve our schools (or address a host of other issues) until we create legislative districts based on geography rather than gerrymandering.

Read the op-ed in its entirety at U.S. News & World Report. 

Weinstein: March Madness at Time Magazine

Time Magazine (courtesy of the New America Foundation) recently re-published a new way to rank NCAA tournament winners according to their graduation success rates. According to the Time bracket, some pretty prestigious academic universities fair pretty poorly. Harvard, Georgetown, Texas, Wisconsin, and UCLA all lose in the first round followed by Virginia in round two. Among the top ten institutions on the list, seven had graduation rates for their basketball teams of 100 percent. In each of these cases, the rates for the basketball teams were higher than for the male population as a whole. In addition, the University of Kentucky’s (UK) Men’s Basketball team finished 20th on the list, with a team graduation rate of 89 percent compared to an overall male student graduation rate of 55 percent. That might be odd to some basketball aficionados given the large number of “one and done” players at UK (players who go professional after one year of college ball).

So what explains the discrepancy? Is UK really graduating 89 percent of its players? Is the Time Magazine bracket accurate? The answer for both is no.

It is important to understand that Time are not actually using graduate rates (how many entering students get their degrees) with regards to college basketball players. Rather, they have chosen to utilize the NCAA’s questionable bogus Academic Progress Rate (APR), which does not count many “one and done” players who leave to go onto the pros (NBA or elsewhere)

How does APR work? The system awards one point for each scholarship athlete in good academic standing and one for each one who either stays in school or graduates. So if a team has 10 scholarship players, and one drops out and is not on track to graduate, but all the others keep their grades up and either stay in school or graduate, then the team would earn a very good APR score (18 out of 20 points).

Now, it might seem that with all the early departures, Kentucky’s APR would take a big hit. However, if a scholarship athlete in good academic standing leaves to pursue a professional career, there is an adjustment to the APR so that there is no penalty.

So schools like Kentucky, which in reality graduate very few basketball players, get ranked high on Time’s list, while schools that actually graduate most of its players like the University of Virginia, University of Wisconsin, and Georgetown University look poor in comparison (disclosure, I graduated from Georgetown University in 1985).

Second, the comparison of APR and graduation rates for the male student populations at large is not “apples to apples” because APR does not include all dropouts but a graduation rate does. This makes the bracket pretty worthless in terms of usefulness.

Finally, there is the question of whether or not the APR data provided is even accurate. As recent scandals have underscored (see Syracuse University and the University of North Carolina), some institutions may be using a number of tactics (in violation of NCAA rules) to help student-athletes stay in good academic standing.

Maybe Time and New America should leave the prognosticating to the professional bracketologists.

Paul Weinstein Jr. is a Senior Fellow at PPI and directs the Graduate Program in Public Management at Johns Hopkins University.

U.S. News & World Report: Why Charter Schools Work — Or Don’t

Nothing frosts me more than Diane Ravitch and her friends’ charge that charter schools amount to “corporate reform.” This is such nonsense. The charter movement was launched in the 1990s by public activists and state legislators – most of them Democrats – while business conservatives were busy pushing standards or vouchers.

The critics also love to repeat that charters perform no better than other public schools. This statement may have been true in 2009, if one accepts the critics’ favorite study, from Stanford’s Center for Research on Education Outcomes or CREDO. But a closer look at those results reveals a deeper truth. Where charter authorizers do their jobs, charters vastly outperform traditional public schools, with far less money. Where authorizers fall down on the job, letting failing charters live on just like traditional schools, the average charter performs no better, and sometimes worse.

The original charter idea was to open the public school monopoly to competition from new schools, operated on contract by other organizations: nonprofits, teacher cooperatives, universities, even for-profit businesses. The charter was usually a five-year performance contract, laying out the results expected from the school. Charter authorizers – typically school districts or state boards of education – would reject charter applications from groups that did not appear equipped to succeed, and they would close schools if students did not learn as promised.

Continue reading at U.S. News & World Report.

Press Release: Osborne to Lead PPI Project on Reinventing America’s Schools

For Immediate Release
January 21, 2015

OSBORNE TO LEAD PPI PROJECT ON REINVENTING AMERICA’S SCHOOLS

WASHINGTON, D.C.—David Osborne, co-author of Reinventing Government and other highly regarded books on public sector reform, will direct a new Progressive Policy Institute (PPI) Project on Reinventing America’s Schools. The project will examine K-12 innovation, with a special focus on the emergence of new governance arrangements that allow for more school and teacher autonomy, tailored instruction to diverse student needs, and greater accountability to the public.

“As one of America’s leading experts on public innovation, David is uniquely suited to lead our work on public school reinvention,” said PPI President Will Marshall. “As our political leaders turn their attention to reducing economic inequality, it’s hard to imagine a more urgent priority than closing the achievement gaps in our K-12 system.”

“I am delighted to be working again with PPI, which played a pioneering role in the public school choice and charter school movements,” said Osborne. “We believe that creating a public education system of charter and charter-like schools is the key that will unlock the door to dramatic improvement, as it already has in cities such as New Orleans, Washington, D.C. and Denver. Our hope is that this research will speed the transformation of school districts throughout the country.”

In an op-ed for last Sunday’s Washington Post, Osborne argued that giving teachers more control would improve school performance and help retain quality teachers in the classroom.

Osborne is the author of the forthcoming book, Reinventing America’s Schools: Creating a 21st Century Education System, and the co-author of five books including: The Price of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis (2004), The Reinventor’s Fieldbook: Tools for Transforming Your Government (2000), Banishing Bureaucracy: The Five Strategies For Reinventing Government (1997), and Laboratories of Democracy (1988). He has also authored numerous articles for the Washington Post, the Atlantic, the New York Times Magazine, Harpers, The New Republic, Governing and other publications.

In 1993, Osborne served as a senior advisor to Vice President Gore, to help run what the Vice President often called his “reinventing government task force,” the National Performance Review. He was the chief author of the September 1993 NPR report, which laid out the Clinton Administration’s reinvention agenda, called by Time “the most readable federal document in memory.”

The Project on Reinventing America’s Schools is made possible by generous support from the Walton Family Foundation and The Eli and Edythe Broad Foundation.

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Washington Post: To improve schools, let teachers run them

Walk through a typical public school, and you see students, sitting in rows of identical desks, listening to teachers talk. Unless the teacher is particularly inspiring, half of the students are zoning out. This isn’t just a problem for teachers, half of whom leave the profession within their first five years. It’s also a problem for their pupils: Disengaged teenagers do not make the best students.

Now imagine if students were instead encouraged to work on projects they chose: building robots, writing plays, researching why bees are dying off by the millions.

When teachers run their own schools, they often make such changes. “We’re competing against Xbox 360, and over-scheduled days with soccer practices and very dynamic lives,” says Kartal Jaquette, one of 10 teachers who run the Denver Green School. “Are you almost as interesting as a video game? Are you getting almost as much attention as a soccer coach might? Is it as much fun? Because if not, they’re going to tune you out.”

Teachers are in charge of at least 70 public schools in 15 states; most, but not all, are charter schools. Ten more teacher-run schools, including one in Maryland’s Prince George’s County, are in the planning stages. These schools are not only redesigning the learning process to better engage students, they’re improving student performance. On top of that, they’re stemming the high dropout rate among teachers.

Continue reading at the Washington Post.

The Hill: For free community college, completion is key

President Obama’s proposal for free community college is an ambitious effort to address critical gaps in America’s post-secondary education and career training systems. However, it may fall flat before it even gets off the ground, and that’s not just because of its high price tag. It’s because community college success depends not on how many students enroll, but how many complete.

Under President Obama’s proposal, all Americans will have access to two years of free tuition at our nation’s public community colleges. The only requirements are to maintain at least C+ grades and to be making “steady progress” toward a degree. It calls for the federal government to cover three-quarters of the estimated $60 billion cost, with states covering the rest.

Certainly, increasing community college enrollment is a good start for boosting youth employment prospects. Young Americans without a post-secondary degree are not faring well in today’s workforce. My own research shows how they have been gradually pushed down and out of the labor market, in a phenomenon I call the “Great Squeeze.”

Continue reading at The Hill.

Earnings for Young Americans: Which City Tops the List?

For young Americans, Washington, D.C. may have more to offer than government jobs and free museums.  It may also provide more opportunities to get a raise than any other top 10 U.S. city.

According to my analysis of new Census data on young Americans, Washington, D.C. was the only top 10 U.S. city, by population, where young workers saw an increase in real median earnings since 2000 (in addition to having the highest real median earnings overall).  Young workers in every other top 10 U.S. city experienced sizable declines.  More than half – six – of the top 10 cities saw declines greater than 10 percent, with young workers in Miami and Atlanta enduring real declines of more than 15 percent.

The table below shows the 2000-2013 change in real median earnings for young Americans age 18-34 working full-time by major U.S. city, where 2013 is measured as a five-year average over 2009-2013. Data for 2000 comes from the 2000 Census long form, and data for the 2009-2013 five year average comes from the American Community Survey 2009-2013 five-year estimate.

Median Earnings for Young Americans Aged 18-34 in the Ten Most Populated Metro Areas

  2013 Median Earnings         (in 2013$)* 2000-2013 Change           (in 2013$)** 2000-2013 Percent Change** Percent of 18-34 year-olds with a college degree or higher, 2013**
Washington, D.C. 47,380 1,560 3.4% 38.9
Boston 44,548 -2,196 -4.7% 38.9
New York City 42,108 -3,216 -7.1% 33.3
Philadelphia 39,413 -3,582 -8.3% 28.5
Houston 33,674 -4,082 -10.8% 21.0
Los Angeles 33,667 -4,200 -11.1% 23.6
Chicago 38,415 -5,111 -11.7% 30.2
Dallas 33,369 -5,660 -14.5% 22.6
Miami 30,728 -5,683 -15.6% 20.6
Atlanta 34,573 -7,203 -17.2% 25.4
US Average 33,883 -3,472 -9.3% 22.3
*Full-time, year round workers aged 18-34, where 2013 is the average median real earnings over 2009-2013
**Where 2013 is the five-year average over 2009-2013
Source: 2000 Census Long Form, 2009-2013 American Community Survey, PPI

That real median earnings increased in Washington, D.C. while falling elsewhere might help explain why the nation’s capital has become an increasingly popular place to be for young people. The number of 18-34 year-olds living in the D.C. metro area has increased by 19 percent, or 226,000, since 2000, compared to one percent increases in Chicago and New York, and 9 percent nationally. Washington, D.C. also has a high share of employment dependent on the federal government, and a highly educated youth population, both of which may have been less affected by the economic downturn. (Houston, however, was the top city for youth inflows in spite of falling real median earnings, which saw its 18-34 year-old population increase 25 percent since 2000.)

Still, falling real median earnings across the board outside Washington, D.C. suggests the underlying issues affecting young workers is not solely about educational attainment or geography. Other major cities with a higher than average share of young college graduates, such as New York and Chicago, also experienced a decline in real median earnings. This is consistent with my previous research, which shows falling real average earnings for young college graduates at a time when many are questioning the value of a college degree.

Overall, the sharp decline in real median earnings for young workers is troubling. It suggests young Americans continue to face strong financial headwinds during their professionally formative years. Moreover, it could hinder young people’s ability to fully participate in the greater economy long-term. That has significant implications for politicians on both sides of the aisle, especially Democrats who care about creating a more convincing pro-growth agenda.